Skip to main content
Tweeted twitter.com/StackFinance/status/1055202387437256704
edited tags
Link
Bob Baerker
  • 77k
  • 15
  • 100
  • 175
Source Link

What happens if futures contract seller defaults?

I'm considering buying a put future to hedge against interest rate increase. I know there is a certain level of protection from default as required by the contract, but I assume the risk is not zero.

I was wondering what happens in the event that the seller defaults on a future (or I suppose on a naked option for that matter.) Does the buyer have to sue the seller directly, or does the brokerage firm or exchange offer some kind of insurance?